If you want an easy way to layout your virtual hosts on a windows machine, and separate xampp completely from the folder that houses your websites, then this is the easy way to do it.Say you have created a folder structure under C: called server. In this folder you will have subfolders making up the websites/scripts you are testing.

And then you don't have to restart Apache after adding new vhost. The only thing you need is to create a folder in C:/server with appropriate name and then add this name to the line with 127.0.0.1 in hosts file.